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JAIIB-LRAB-RECOLLECTED QUESTIONS FROM MAY 2016


Friends, Updating here the recollected questions from May 2016 Exams. Wish you all the very best for your exam.

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Consumer protection act, 1986

To protect the interests of the consumers, 'The Consumer Protection Act was enacted.'

The Act extends to the whole of India except the State of Jammu & Kashmir.

The Act applies to all goods and services, excluding goods for resale or for commercial purpose and services rendered free of charge and under a contract for personal service.
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Hypothecation pledge -

Pledge - It is used when the bank (or, lender, known as pledgee) takes actual possession of the securities, such as goods, certificates, golds, etc, (you provide it to bank to avail loan) which are generally movable in nature. Bank keeps the securities with itself, and provide loan to you.

Bank will return the securities (possession of goods) to you (borrower, known as pledgor), after you repay all the debts (i.e., loan) to the bank. In case you are unable to pay back, then the bank has the right to sell the assets, and recover the loan amount (with interest).

Example - Gold loans, Jewellry loans, advances against NSC (National Saving Certificates), or loans against any other assets.

Hypothecation - It is used when you (borrower) have the actual possession of the asset, for which you have taken the loan. Generally, this is charged against loans for movable assets, like car, bus, etc. (i.e., vehicle loans). Here, the assets (bus, car, etc.) remain with you, and you are hypothecated to the bank for the loan granted.
In case you are unable to repay the loan amount, then the bank has the right to sell the asset (bus, car, etc.), (which is possessed by you) and recover the total amount (with interest).

Example - Car loans, Bus loans, etc.
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Mortgage types - 1. Simple Mortgage, 2. Mortgage by Conditional Sale, 3. Usufructuary Mortgage, 4. English Mortgage, 5. Mortgage by deposit of title of deeds, 6. Anomalous mortgage

Simple mortgage

In this type of mortgage, the procession of the borrower's property is not transferred to the lender. Though it is not transferred the lender has the right to sell the property if there is no timely return of the loaned money.

Mortgage by conditional sale

On certain conditions like failure to repay the borrowed or mortgage money before the stipulated date will make the sale absolute. If the money is returned on time, then the sale may be considered invalid and such repayments will entitle to transfer of property.

Usufructuary mortgage

The usufructuary mortgage allows transfer of the property, possession to the lender. The monthly repayments are paid to the mortgagee while the title deeds remain with the owner.

English mortgage

A date is fixed by the borrower for the repayment of the debt and transfers the property entirely to the mortgagee or the lender. But on conditions that ensure the lender transfers it back on the borrower's name at the time of repayment.

Mortgage by deposit of title deeds

Mortgage by deposit of title deeds, delivers the title document of the property in question to the lender to create security as well as surety. Most commonly followed in places like Kolkata, Mumbai and other towns where the state government has notified by publication in the official gazette.

Anomalous mortgage

The last one being the Anomalous mortgage is a combination of the different types of mortgages available in the market.

Shantigram Township in Ahmedabad is a good outlet for property investment in Gujarat. Adani real estate, play a major role in the residential property development of the city is here with their upcoming projects. Villas, bungalows, flats or apartments, every housing need will be adhered to with us.
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Minors admitted to partnership

30. (1) A person who is a minor according to the law to which he is subject may not be a partner in a firm, but, with the consent of all the partners for the time being, he may be admitted to the benefits of partnership.

(2) Such minor has a right to such share of the property and of the profits of the firm as may be agreed upon, and he may have access to and inspect and copy any of the accounts of the firm.

(3) Such minor's share is liable for the acts of the firm, but the minor is not personally liable for any such act.

(4) Such minor may not sue the partners for an account or payment of his share of the property or profits of the firm, save when severing his connection with the firm, and in such case the amount of his share shall be determined by a valuation made as far as possible in accordance with the rules contained in section 48:

Provided that all the partners acting together or any partners entitled to dissolve the firm upon notice to other partners may elect in such suit to dissolve the firm, and thereupon the Court shall proceed with the suit as one for dissolution and for settling accounts between the partners, and the amount of the share of the minor shall be determined along with the shares of the partners.

(5) At any time within six months of his attaining majority, or of his obtaining knowledge that he had been admitted to the benefits of partnership, whichever date is later, such person may give public notice that he has elected to become or that he has elected not to become a partner in the firm, and such notice shall determine his position as regards the firm:

Provided that, if he fails to give such notice, he shall become a partner in the firm on the expiry of the said six months.

(6) Where any person has been admitted as a minor to the benefits of partnership in a firm, the burden of proving the fact that such person had no knowledge of such admission until a particular date after the expiry of six months of his attaining majority shall lie on the persons asserting that fact.

(7) Where such person becomes a partner,-

(a) his rights and liabilities as a minor continue up to the date on which he becomes a partner, but he also becomes personally liable to third parties for all acts of the firm done since he was admitted to the benefits of partnership, and

(b) his share in the property and profits of the firm shall be the share to which he was entitled as a minor.

(8) Where such person elects not to become a partner,-

(a) his rights and liabilities shall continue to be those of a minor under this section up to the date on which he gives public notice,

(b) his share shall not be liable for any acts of the firm done after the date of the notice, and

(c) he shall be entitled to sue the partners for his share of the property and profits in accordance with sub-section (4).

(9) Nothing in sub-sections (7) and (8) shall affect the provisions of section 28.
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Fund Based Credit Facilities: Fund based credit facilities involve the outflow of funds meaning thereby, the money of the banker is lent to the customer. They can be generally of following types:

(a) Cash credits/overdrafts (b) Term loans/Demand loans (c) Bill finance

Non-Fund Based Credit Facilities: In this type of credit facility the bank's funds are not directly lent to the customer and they include:

(a) Bank guarantee (b) Letter of credit facility (c) Acceptance facility
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Dissolution of partnership firm

DISSOLUTION BY AGREEMENT

A firm can be dissolved with the consent of all the partners or in accordance with a contract between the partners.

COMPULSORY DISSOLUTION

A firm is dissolved:
(a) if all the partners (except one) are adjudicated insolvent; or
(b) by the happening of any event which makes it unlawful for the business itself to be carried on or the event makes the business unlawful if it carried on in partnership.

However, if the partnership firm is carrying on more than one separate businesses, the illegality of one or more does not cause the dissolution of the firm. The firm can continue to carry on its lawful adventures and undertakings.

DISSOLUTION ON THE HAPPENING OF CERTAIN CONTINGENCIES

A firm is dissolved in the following circumstances. To avoid dissolution in these cases, the partners should expressly agree that the firm shall not be dissolved in these circumstances:
(a) if the partnership is constituted for a fixed term, then by the expiry of that term;
(b) if the partnership is constituted to carry out one or more adventures or undertaking, then by the completion thereof;
(c) by the death of a partner; and
(d) by the adjudication of a partner as an insolvent.

DISSOLUTION BY THE COURT

At the suit of a partner the court may dissolve a firm on any of the following grounds:
(a) that a partner has become of unsound mind;
(b) that a partner (other than the partner suing for dissolution) has become permanently incapable of performing his duties as partner;
(c) that a partner (other than the partner suing) is guilty of conduct which is likely to affect prejudicially the carrying on of the business;
(d) that a partner (other than the partner suing) wilfully or persistently commits breach of agreements in relation to the management of the affairs of the firm or the conduct of its business or it is not reasonably practicable for the other partners to carry on the business in partnership with him because of his conduct with respect to the business;
(e) that a partner (other than the partner suing) has transferred the whole of his interest in the firm to a third party;
(f) that the business of the firm cannot be carried on except at a loss; or
(g) on any other ground which renders it just and equitable that the firm should be dissolved.
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Letter of Credit

Applicant-Buyer-Importer-Opener : He is the person who applies to bank for Letter of Credit

Issuing Bank : The bank which opens the Letter Of Credit on the request of applicant/Buyer.

Beneficiary-Exporter-Seller : The person who is entitled to receive the benefit under Letter of Credit.

Advising Bank / Notifying Bank : The bank in the Beneficiary/Exporters Country through which the letter of credit is advised to the beneficiary.

Negotiating Bank : The bank in the Beneficiary/Exporters Country which negotiate the bills (i.e. make payments on the bills drawn by the seller and accepts the documents.) If the LC specifies a bank then that bank is the Negotiating Bank and is also called the Nominated Bank / Paying Bank. If the LC however does not specify the bank, than any bank can be negotiating bank.

Confirming Bank : The advising bank is only required to advise the credit to the beneficiary. If however in addition to advising the credit the advising bank were to confirm it, then the advising bank will also become confirming Bank.

Reimbursing Bank : It is the bank which is appointed by the Issuing Bank to make reimbursement to the Negotiating, Paying or confirming Bank.

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